The COVID-19 virus is upon us and wreaking havoc with the Australian economy. Accountants and tax agents are at the forefront of delivering the Government’s stimulus packages. On 8 April 2020, the Federal Government introduced into parliament the following bills:
In addition, there were two appropriation bills introduced. All of these bills were passed by both houses of parliament on 8 April 2020 and received Royal Assent on 9 April 2020. In summary, the legislation:
The purpose of the JobKeeper scheme is to support businesses in retaining staff by continuing to pay them, despite suffering a significant business downturn. The Government considers that this scheme will assist businesses to regain momentum once the COVID-19 crisis has passed.
The Government has chosen to administer the JobKeeper scheme using a fortnightly time period. This is referred to as the “JobKeeper fortnight”. Under the rules, each of the following is a JobKeeper fortnight:
The scheme operates by having eligible employers paying eligible employees at least $1,500 per JobKeeper fortnight. This does not mean that an employer needs to change its pay period if it does not pay its employees on a fortnightly basis or if the employer does pay its employees on a fortnightly basis on a fortnight that is different from the JobKeeper fortnight. If an employer pays its employees over a longer period than a fortnight (say a month), the monthly payments are apportioned to the JobKeeper fortnights on a reasonable basis.
Despite the fact that the Payments and Benefits Act provides for a “prescribed period” between 1 March 2020 and 31 December 2020, the Rules only provide for JobKeeper payments up to the fortnight ending 27 September 2020. Whether this period will be extended, remains to be seen.
For the first two JobKeeper fortnights, there is a transitional provision with regard to entitlement. Entitlement usually arises for those JobKeeper fortnights and later fortnights in which eligible employers are registered under the scheme prior to the end of a JobKeeper fortnight. There is a transitional exception to this for the month of April 2020. In April 2020 employers may register by 26 April and if they meet the eligibility rules receive JobKeeper payments for eligible employees for JobKeeper fortnights in the two JobKeeper fortnights commencing from 30 March 2020.
To be eligible to apply for the JobKeeper payment, an entity (which can include a sole trader) must have a projected decline in turnover to at least the extent of the applicable percentage for that entity.